Explain how long-run economic profits are linked to entry in monopolistic competition and perfect competition
What will be an ideal response?
In the short run all market structures allow for positive economic profits. However, those profits can only be maintained in the long run if other firms cannot enter the industry. If they can they will enter and competition will force the price of the good down until economic profits are zero.
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Suppose that a study is released stating that the fewer books people read, the more velvet paintings they tend to own. This is best described as an example of
A. positive correlation. B. negative correlation. C. positive causation. D. negative causation.
An ad valorem tax on suppliers causes the _____ to shift by a constant _____
a. supply curve; percentage b. supply curve; amount c. demand curve; percentage d. demand curve; amount